Energy Efficiency and Affordable Housing in South Africa

Ideas on Energy is excited to welcome its first guest blogger, Elizabeth Ngoye. Elizabeth works with E+Co, a fantastic organization that for the last 15 years has been investing in companies in the developing world that are finding innovative ways to provide clean and affordable energy. E+Co’s outstanding work has been internationally recognized and recently they were declared a finalist for the Zayed Future Energy Prize. Elizabeth brings us a great success story from Africa about how one company that E+Co works with is helping make affordable housing more affordable by addressing energy efficiency.

The South African government has recently made affordable housing a priority. City governments are each building between 10,000 and 20,000 new low cost houses per year but few of these housing programs address the energy challenges that residents of these new homes will face. Energy use (mostly cooking and water heating) represents up to 35% of monthly household expenditures.

Solar water heating is a well-established technology in the Republic of South Africa that has the potential to address some of these challenges. Historically, solar water heaters (SWHs) in the country were mainly promoted to middle and upper income households because, due to lack of capital, low income households could not afford the high initial cost of SWHs. As a result, their main means to heat water were electric kettles and gas cookers. These technologies are not only inefficient but also expensive and environmentally unfriendly.

Atlantic Solar (Pty) Limited, a South African enterprise and E+Co investee, manufactures, retails, and installs a range of SWHs. This enterprise operates throughout South Africa through its network of dealers. Established in 1990, E+Co first invested in Atlantic Solar in May, 2007 to support the implementation of their growth strategy developed by CEO Mr. Helmut Hertzog, which is helping them to improve manufacturing and installation processes and secure qualified personnel.

The Western Cape Province of South Africa realized the need for provision of efficient heating systems for its Low Cost Housing Project in order to ensure household savings. In 2007, Atlantic Solar won a contract to supply and install 1,000 solar water heaters in several low cost housing areas in the Western Cape Province. The project was implemented jointly with the local communities who were required to assign the systems to beneficiaries with a focus on the elderly, people with medical challenges, and single mothers.

In February 2010, I had an opportunity to visit the Atlantic Solar installation in my capacity as E+Co East and Southern Africa Monitoring and Evaluation Officer. I conducted a site visit along with Mr. Helmut and Atlantic Solar’s Head of Installations to low cost houses in Nyanga community, Cape Town. We met with the Ward Councilor for Ward 37, who was very grateful for the project’s positive impact on the people of his district. “The project has improved lives through improved water heating systems and shelter. The major impact has been reduced electricity bills in households, and hence income savings.” The Councilor informed our team that he would like a scale-up of the pilot phase to ensure increased impact. “Those who live in the Nyanga community are among the poorest of the poor, and hence need more support from the government to increase access to clean and low cost energy technologies,” he added.

A household survey by Kakaza Trade Company within the Nyanga community revealed that the project has significantly changed the lifestyles of the beneficiaries. Boniswe Mhlanga (91) is an elderly woman heading a family of five people. Boniswe says she is very happy with the system as she no longer spends much on electricity for water heating. Due to the installation of an 80L solar water system on the roof, her electricity bill has gone down to 50 Rands from 150 Rands per month (equivalent to US $ 6.77 from US $ 20.33). Other community members shared similar stories about the installation of SWH in their homes.

In addition to the benefits that have been realized by end users, Mr. Hertzog indicated that Atlantic Solar has been able to use the profits from the project to expand their operations and develop new capabilities. The company has been able to acquire additional factory space and enough new installation tool sets to send five installation teams on the road. They have also bought two 5kVa generators, enabling them to work in remote areas with no access to electricity.